July 17, 2024

As seasoned investors know, one of the best ways to retire rich is to start saving—and investing—early. But how should that message be communicated to actual young people? For Generation Z investors, it’s TikTok.
With Gen Z favoring TikTok and YouTube over Google GOOG, -0.18% for searches, it becomes more challenging to attract young investors who are constantly bombarded with digital content.
Nearly 40% of Gen Z—those born from 1997 to 2012—go to TikTok for online searches, according to internal data from Google, which was reported by TechCrunch. 
“Buying ads in The Wall Street Journal isn’t going to reach this market. You have to go where they are,” Eric Johnson, professor of business at the Columbia Business School at Columbia University. 
Johnson said Gen Z has greater uncertainty that Social Security will be there for them. That means they may need to start saving on their own earlier and become savvier about investing. Gen Z also is starting to invest at a time of economic uncertainty and rising inflation, making their financial beginnings more turbulent.
“There’s a big difference between investing and saving for retirement,” Johnson said. “What works for retirement savings is making the savings as automatic as possible and then not touching the money. And that may be difficult for a generation bombarded with bright and shiny objects all the time.” 
According to the 2022 Investopedia Financial Literacy Survey, Gen Z expects to stop working at 57, compared with age 64 for Gen X (born 1965-1980), and is the next generation up for retirement.
Yet only 7.7% of Gen Z members ages 15 to 23 owned a retirement account as of 2020, compared with 49.5% of millennials ages 24 to 39, according to the U.S. Census Bureau. Nearly 18% of millennials (born 1981-1996) owned retirement accounts when they were ages 15 to 31.
“The best way to reach them is to speak their language and make the value in what you’re saying clear. Trends and ‘gotcha’ content is great, but Gen Z really wants to know how to adult correctly,” said Haley Sacks, who is known as Mrs. Dow Jones. “I find my followers to be quite smart. The idea that you have to dumb it down for younger people — I have not found that at all.”
Gen Z is an active investment group, however. According to the 2022 Investopedia Financial Literacy Survey, more than half of Gen Z adults are already invested—with 26% of that group invested in the stock market. 
The survey found nearly 40% of Gen Z investors get investing insights from YouTube, and another one in four turn to TikTok and Instagram. But 47% of millennial investors favor internet searches.
Meanwhile, a March 2021 survey by CreditCards.com found that Gen Z investors were nearly five times as likely to report that they get financial advice from social media than adults aged 41 and over, with 28% turning to friends and online influencers for guidance.
Fidelity Investments started its TikTok channel in June 2021, approaching it as an educational resource that young investors could not only check out once, but come back to again and again.
“We know many of our young investors are on social platforms like TikTok, Instagram and Reddit. This is a generation that’s craving financial content and having conversations on social platforms,” said Kelly Lannan, Fidelity’s senior vice president of emerging customers. 
“We knew in order to be relevant on TikTok we had to create bite-sized content catered to the younger audience. We also understood financial topics can be difficult to grasp, so we looked to break down the terms to be accessible and approachable,” Lannan said.
Fidelity also is continuing to innovate the ways in which it interacts with customers and provides financial education, through platforms such as a Web 2.0 space like TikTok, or Web 3 like the metaverse, Lannan said.  
Fidelity found in a recent survey that 41% of Gen Z turn to social media influencers to educate themselves on investing—more than other generations such as Millennials or Gen X. As a result, Fidelity works with a handful of influencers on TikTok, such as @chandlerisaac, @olivialmarcus, @nicktalksmoney, @faaresq and @calltoleap, to tap into their already amassed audiences and share its financial expertise. 
Still, regardless of age or platform, sage advice on investing remains the same.
“When it comes to advice, we see age as less significant than wealth and goals and preferred engagement model,” said Colleen Jaconetti, senior investment strategist at Vanguard. “For those who are just starting out or those who may not have a lot of wealth accumulated, it makes sense to approach them online or with a robo-type platform. As they go through life and their situation gets more complex, an in-person approach makes sense.”
Jaconetti said the advice, regardless of the marketing platform, is the same for any person of any generation: spend less than you earn, have a budget, take advantage of matching contributions, have an emergency fund, pay down debt and save 12% to 15% of your earnings. 
Jaconetti said Vanguard reaches investors in various ways such as blogs, email marketing, LinkedIn and Twitter but has not delved into TikTok yet.
Gen Z has both the blessing and the curse of a lot of available financial information, Sacks said.
“Gen Z is more digitally-equipped than any generation. They’re also in a time of economic turmoil, inflation, and unclear and unsteady times. Being able to weed through all the content — and there’s more content than ever before — is important,” said Sacks.
“A lot of the success in retirement is keeping your head down and slow and steady wins the race. Everyone has a desire to get rich quick, but the best thing is a more measured approach,” Sacks said. “Retirement and the decision to stop working is the biggest, most expensive decision you’ll ever make.” 
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Jessica Hall is a Retirement Reporter for MarketWatch.
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